No tax please, we’re British
25 July 2012
The Electrical Contractors’ Association (ECA) has condemned tradespeople who take cash-in-hand payments to avoid paying VAT, saying that they are cheating the country out of millions.
However, the ECA believes that comments by Treasury Minister David Gauke should re-open the debate on the rate of VAT paid on vital construction work in an effort to curb the informal economy while sparking genuine growth during tough times.
Steve Bratt, ECA CEO says: “Tradespeople seeking to avoid tax through back hand cash payments must be stamped out. Not only does ‘paying under the table’ leave customers with no recourse should something go wrong, it denies the country millions in tax revenue. The Cut the VAT Coalition, of which the ECA is a member, estimates that in 2010, around £9.3 billion worth of maintenance and repair work was carried out on homes through the informal economy; a significant loss to the Treasury. However, this demonstrates the huge demand that legitimate businesses could capitalise on. In these tough times, the Treasury needs to take bold action to support business growth by reducing VAT to 5% for key sectors such as repairs and maintenance. This action alone could drive the economy forward substantially.
“A cut in VAT to 5% could encourage homeowners to undertake repair work and even upgrade their properties with some of the green technologies incentives that are part of the Government’s sustainability agenda. This would help the consumer as well as the thousands of businesses involved in this work. A tax cut would also level the playing field and undermine the growing black economy of ‘cowboy operators’ who knock off VAT for cash payment, undercutting bone fide professionals.”
What’s your opinion on this? Would you readily accept cash for work to avoid tax? Vote anonymously in our poll and let us know.
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